HomeMy WebLinkAbout25I - FINANCIAL AUDIT SVCS
CITY COUNCIL MEETING DATE:
~
~
REQUEST FOR
COUNCIL ACTION
CLERK OF COUNCIL USE ONLY:
MAY ~, 2006
TITLE:
APPROVED
o As Recommended
o As Amended
o Ordinance on 1" Reading
o Ordinance on 2"' Reading
o Impiementing Resolution
o Set Public Hearing FDr
AWARD CONTRACT TO MORELAND &
ASSOCIATES, INC. FOR
COMPREHENSIVE FINANCIAL AUDIT
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CITY MANAGER
CONTINUED TO
FILE NUMBER
RECOMMENDED ACTION
Direct the City Attorney to prepare and authorize the City Manager and the
Clerk of the Council to execute a four-year agreement with Moreland &
Associates, Inc. for comprehensive financial audit services, and other
related auditing services in a total aggregate amount not to exceed
$469,500.
DISCUSSION
Annually, the City of Santa Ana retains the services of a certified public
accounting firm to conduct the annual audit of the City's financial
statements. The audits are conducted in accordance with auditing standards
generally accepted in the United States and applicable under the Government
Auditing Standards issued by the Comptroller General of the United States.
In addition, the audit firm will issue separate financial reports on the
Redevelopment Agency and the Housing Authority, as well as provide the
necessary compliance reports on redevelopment agency activities and federal
grants. The City will also be requesting assistance with implementing new
Governmental Accounting Standards Board pronouncements.
In February 2006, the City conducted a formal Request for Proposal (RFP) to
select a certified public accounting firm to serve as the City's
independent auditor for the next four fiscal years. proposals were sent to
six established accounting firms with strong governmental experience. Four
of the six accounting firms responded. The remaining two firms did not
respond to the RFP indicating a lack of adequate staff to conduct the
audit.
A five-member selection committee evaluated the four proposals submitted.
The evaluation was based on several factors, including the firms' technical
qualifications, thoroughness of auditors proposed scope of work, experience
with similarly sized governmental agencies, ability to meet clearly defined
work schedules, and reasonableness and competitiveness of the audit fee.
Based on the RFP criteria, the companies received the following ratings:
251-1
Award of Contract for Comprehensive
Financial Audit Services
May 1, 2006
Page 2
Firms
Proposal
Score
4-Year
Total
Moreland & Associates, Inc.
Lance, Soll & Lunghard, LLP
Macias, Gini & Company, LLP
KPMG, LLP
94.4
84.0
78.6
71.0
$469,500
$433,830
$1,006,059
$1,050,000
Moreland & Associates, Inc. was selected as the best firm to conduct the
City's annual financial audit. They demonstrated adequate staffing and
technical knowledge for a city the size of Santa Ana. Lance, Soll &
Lunghard, LLP also demonstrated good technical knowledge, but the committee
had concerns regarding the adequacy of the staffing levels to perform the
audit given the multiple services required. As such, the committee
determined that the eventual cost could far exceed the proposal cost as
submitted.
Gi ven these circumstances, staff recommends contracting with Moreland &
Associates, Inc. to perform the annual audit services. Moreland &
Associates, Inc. is a large regional firm that is well-established in the
community with extensive experience in governmental auditing, accounting,
and financial reporting. The firm has serviced a number of larger agencies
including Garden Grove, Municipal Water District of Orange County, the
County of Orange, Fountain Valley, Tustin, Escondido and Fullerton.
FISCAL IMPACT
Funds for these services will be included in the proposed FY 2006-07
Finance and Management Services Agency budget within the Accounting and
Budget Division (account 11-171-6191) to cover the audit costs related to
the City's general fund in the first year, with additional funds in the
Redevelopment Agency, Housing Authority and CDBG programs for their
respective costs. Additional funds will be budgeted on an annual basis to
cover the audit fees and or other services requested in subsequent fiscal
years. The four year total includes the quoted audit fees and additional
funds staff determined may be needed for additional services.
APPROVED AS TO FUNDS AND ACCOUNTS:
~~tft
I~ancisco Gutierrez
~ Executive Director
Finance & Management
~
u
Services Agency
251-2